By Louis Charbonneau

UNITED NATIONS, May 23 (Reuters) - A former U.N. official on Friday accused the United Nations' internal oversight body of covering up evidence of gold smuggling and arms trafficking by U.N. peacekeepers in the Democratic Republic of Congo.

But the U.N. Office of Internal Oversight Services, or OIOS, dismissed the charge as baseless.

The latest allegation comes a week after the United Nations confirmed that it was investigating accusations that its peacekeepers in eastern Congo committed sexual abuses, which aid workers said involved paying children for sex.

Matthias Basanisi, former deputy chief investigator at the OIOS, wrote in an opinion piece published in The New York Times that U.N. rejections of criticism that it failed to police itself in Congo were not credible.

Basanisi says that in 2006 his team of internal oversight investigators found "credible" evidence of abuses by Pakistani peacekeepers in Congo.

"My fellow team members and I were appalled to see that the oversight office's final report was little short of a whitewash," he wrote.

"We found corroborative information that senior officers of the Pakistani contingent secretly returned seized weapons to two warlords in exchange for gold, and that the Pakistani peacekeepers tipped off two warlords about plans by the (U.N.) peacekeeping force and the Congolese Army to arrest them."

But, he says, much of the evidence that he uncovered was not included in an official report released last year.

Pakistan has dismissed the allegations against its peacekeepers as unfounded. OIOS responded to the opinion piece by saying that it "categorically refutes all the accusations by Mr Basanisi as baseless."

"Professional investigations cannot rely on rumor and unsubstantiated claims allegations," OIOS said in a statement.

The U.N. Internal Oversight office said Basanisi "was not able to provide credible corroboration of a single allegation" and "never progressed further than cataloging allegations."

Basanisi said that he believed that one of the motives for the oversight office, the United Nations' independent auditing body, producing what he describes as "watered-down reports" is that Pakistan is one of the largest U.N. troop contributors.

The New York-based Human Rights Watch has already made allegations similar to Basanisi's. It said little effort was made to investigate reports of abuses, mostly in Congo's lawless eastern borderlands -- a patchwork of rebel and militia strongholds where most of the peacekeepers are based.

Also, not all U.N. officials were so categorical in their rejection of Basanisi's accusations.

One U.N. official familiar with the allegations told Reuters on condition of anonymity that the United Nations has tried to do everything its power to clean up the behavior of peacekeepers but can do little to force countries to act if they are not interested in improving their troops' behavior. (Editing by Doina Chiacu)

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